When Big New York Private Equity Came Up Against A Tiny London Football Team

If they met on the pitch it would be a mismatch of epic proportions. And off the pitch too this is a classic David vs. Goliath story.

By any measure New York-based private equity fund Meadow Partners should have pulled off an easy win against Dulwich Hamlet, the small South London football team with which it is now locked in battle over a proposed residential development.

But Meadow Partners did not count on the reaction from the wider public when it tried to push through its plans  — and now it is facing the prospect of a major upset.

The battle between Meadow and Dulwich relates to a deal being undertaken by Meadow Residential, a subsidiary of Meadow Partners. The parent firm, run by former Westbrook partner Jeff Kaplan, has bought and sold more than $3B of assets since it was founded in 2009.

In 2014 Meadow bought Dulwich’s Champion Hill stadium and some of the surrounding land and sought planning for a development of 155 apartments. The plan was to build a new stadium on the site for Dulwich and build the homes alongside.

Dulwich are small compared to the giants of the Premier League, but the 2,000 fans they draw each week give them a much larger average gate than other teams in the amateur Bostick League Premier Division.

They have a history dating back to 1893, and they have become something of a hipster’s favourite, with their distinctive pink-and-blue scarves common on the gentrified streets of the surrounding area.

In spite of this popularity, like many non-league football teams, they have consistently struggled to make ends meet. When Meadow bought the site, it agreed to let Dulwich play there rent-free, financially supported the club and the firm said it has paid off more than £750K in debt the club owed.

The relationship soured when last year local authority Southwark Council rejected Meadow’s plans on the basis they did not comprise enough affordable housing.

As a result, earlier this year Meadow stopped its funding of the club, barred it from playing at Champion Hill and handed it a £121K bill in unpaid back rent, a sum Dulwich was unable to pay.

Meadow also informed Dulwich that it had trademarked “Dulwich Hamlet Football Club", and barred the club from using its own name.

"Meadow has been unable to financially support the club while Southwark Council is determined to prevent the stadium proposals from progressing," it said in a statement. "Meadow would never have committed such significant sums of money to support the club if it did not genuinely believe in its importance and value to the community.”

"Frankly I think they've tried to bully us," said Tom Cullen, one of Dulwich's directors. "This might work in New York property transactions but it's not how you deal with a much-loved, 125-year-old football club.”

Dulwich were forced to share a ground with nearby rivals Tooting & Mitcham, and are relying on funding campaigns from fans to survive. 

But a groundswell of support caused by media coverage of the row may just have saved Dulwich. Former Manchester and England star Rio Ferdinand offered Meadow £10M for the site — Meadow paid around £6M for it originally — but the offer was rejected.

Last month Southwark Council approved a proposal that would allow it to buy the site from Meadow and build its own scheme, comprised entirely of affordable housing. It met with Meadow on 19 March. The result of the meeting has not been disclosed, but Meadow has consistently insisted the site is not for sale.

However, Southwark Council has the option to use a Compulsory Purchase Order and force through the purchase of the site.

"Since this turned sour last autumn their behaviour towards the club has been despicable,” Southwark Council Leader Peter John said. "This is a situation wholly of Meadow's creation. In this instance we are standing up to developers on behalf of the community.”

Meadow has offered to let Dulwich play at their stadium again, but the club continues to play at the home of Tooting & Mitchum. A CPO would be a long and torturous process, potentially taking more than a year if Meadow appealed in court.

But from looking down and out, Dulwich Hamlet are still in the game, and Meadow has seen the prospect of an easy victory slip away. It is still all to play for.